McDonald's

The McDonald's Corporation (NYSE: MCD) is the world's largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries.[4][5] Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald; in 1948 they reorganized their business as a hamburger stand using production line principles. Businessman Ray Kroc joined the company as a franchise agent in 1955. He subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth.[6]

A McDonald's restaurant is operated by either a franchisee, an affiliate, or the corporation itself. The corporation's revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27 percent over the three years ending in 2007 to $22.8 billion, and 9 percent growth in operating income to $3.9 billion.[7]

McDonald's

primarily

sells hamburgers, cheeseburgers, chicken, french drinks,milkshakes and desserts. In response to

fries, breakfast items, soft

changing consumer tastes, the company has expanded its menu to include salads, fish, wraps, smoothies and fruit.[8]

STRENGTHS 1. Largest fast food market share in the world. McDonalds is the largest fast food restaurant chain in terms of total world sales (8%). It is the second largest outlet operator with more than 34,000 outlets, serving 69 million consumers every day in 119 countries. 2. Brand recognition valued at $40 million. Companys brand is the most recognized brand in fast food industry and is valued at $40 billion. McDonalds is also famous by the Ronald McDonald clown. 3. $2 billion advertising budget. McDonalds spends on advertising more than the next 4 fast food restaurant chains combined.

4. Locally adapted food menus. The fast food chain is operating in many diverse cultures where tastes in food are extremely different than those of US or European consumers. Thus ability to adapt to local tastes is one of McDonalds strengths. 5. Partnership with best brands. McDonalds offers only most popular brands in its restaurants, such as: Coca Cola, Dannon Yogurt, Heinz ketchup and others. 6. More than 80% of restaurants are owned by independent franchisees. Therefore, McDonalds can focus more on perfecting its serving system and marketing campaigns. 7. Children targeting. The business successfully targets very young children through offering playgrounds, toys with its meals and advertisements. WEAKNESSES 1. Negative publicity. McDonalds is heavily criticized for offering unhealthy food to its customers, stimulating obesity and strong marketing focus on very young children. 2. Unhealthy food menu. Although McDonalds tries to introduce healthier choices in its menu, the menu is largely formed of unhealthy meals and drinks. Such menu offering prompts protests by organizations that fight obesity and hence, decreases McDonalds popularity. 3. Mac Job and high employee turnover. Mac Job is a low paid and a low skilled job, which is often seen negatively by its employees. This results in lower performance and high employee turnover, which increases training costs and add to overall costs of McDonalds. 4. Low differentiation. McDonalds is no longer able to substantially differentiate itself from other fast food chains (at least not enough to gain some market share) and opts to compete by price rather than by additional features. STRATEGIES EMPLOYED 1. Increasing demand for healthier food. While demand for healthier food increases, McDonalds could introduce more healthy food choices in its menu and reverse its weakness into strength. McDonalds is trying to seize such an opportunity and soon plans to open only vegetarian restaurant in India.

2. Home meal delivery. McDonalds could exploit an opportunity of delivering food to home and increase its reach to customers. 3. Full adaptation of its new practices. McDonalds has redesigned its logo and restaurant design in 2006. In addition, it has introduced some new practices. In a result, remodeled restaurants have seen 8-9% higher than average market growth. McDonalds should finish remodeling all of the restaurants and adapt the best practices in them as soon as possible. 4. Changing customer habits and new customer groups. Changing customer habits represent new needs that must be met by businesses. So far, the company has been successful in introducing its McCaf, McExpress and McStop restaurants to meet the changing customer habits and the needs of previously untapped customer groups. 5. Saturated fast food markets in the developed economies. The fast food market in the developed countries is already overcrowded by so many fast food restaurant chains and this already proves to be a threat to McDonalds as it barely grew through 2012. 6. Trend towards healthy eating. Due to government and various organizations attempts to fight obesity, people are becoming more conscious of eating healthy food rather than what McDonalds has to offer in its menu. 7. Local fast food restaurant chains. Local fast food restaurants can often offer a more local approach to serving food and menu that exactly represents local tastes. Although McDonalds does a great job in adapting its own menu to local tastes, the rising number of local fast food chains and their lower meal prices is a threat to McDonalds. 8. Currency fluctuations. The business receives a part of its income from foreign operations. The profits that are sent back to US have to be converted into dollars and may be affected by the exchange rates, especially when the dollar is appreciating against other currencies. In 2012, McDonalds profit was largely affected by appreciating dollar. 9. Lawsuits against McDonalds. McDonalds has already been sued for many times and lost quite a few lawsuits. Lawsuits are expensive as they require time and money. And as McDonalds continues to operate more or less the same way, there is high probability for more expensive lawsuits to come. REASON FOR BEING A GLOBAL BRAND

McDonalds, the leading global foodservice retailer, stands out because of its exceptional brand management, significant global presence, leadership in sustainable practices and admirable approach to consumer engagement. McDonalds has more than 33,500 restaurants in 119 countries and the Golden Arches continue to expand, most notably in Asia. The company deftly manages its franchise model, delivering a remarkably consistent customer experience while still allowing for locally relevant menu and service variations (such as home delivery in India and China). The company is also working to respond to critics by increasing the number of healthy menu options and effectively communicating its sustainability efforts to both customers and employees, building energy saving and waste reduction into staff incentives. Demonstrating its commitment to brand development, McDonalds is repositioning itself to appeal to a broader audience, particularly by redesigning its outlets and making them more modern, comfortable, and upscale. The McCaf experience is another example of McDonalds flexibility and its efforts to appeal to a broader group of customers. On the digital front, McDonalds Make Your Own Burger campaign in Germany and the Netherlands used crowdsourcing to generate new recipes and promotions. The campaign created significant digital buzz and positioned the brand as a digital innovator, helping to further build the brands strength.

SOURCES
http://www.interbrand.com/en/best-global-brands/2012/McDonalds http://www.strategicmanagementinsight.com/swot-analyses/mcdonalds-swotanalysis.html https://en.wikipedia.org/wiki/McDonald's